Illegal Aliens: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

Published by the Government Accountability Office on 1999-07-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             United States General Accounting Office

GAO                          Testimony
                             Before the Committee on the Judiciary, Subcommittee           on
                             Immigration and Claims, House of Representatives

For Release on Delivery              ATTrIT
Expected at 10:00 a.m. EDT
Thursday July 1, 1999
                             ILLEGAL ALIEN1

                             Significant Obstacles to
                             Reducing Unauthorized
                             Alien Employment Exist
                             Statement of Richard M. Stana
                             Associate Director, Administration of Justice Issues
                             General Government Division

                                       Accountability * Integrity * Reliability


ILLEGAL ALIENS: Significant Obstacles to
Reducing Unauthorized Alien Employment
               Mr. Chairman and Members of the Subcommittee:

               I am pleased to be here today to discuss the Immigration and
               Naturalization Service's (INS) enforcement of workplace immigration
               laws. My statement will outline the results presented in our recently
               completed report, Illegal Aliens: Significant Obstacles to Reducing
               Unauthorized Alien Employment Exist (GAO/GGD-99-33, April 2, 1999).

                One of the primary magnets attracting illegal aliens to the United States is
               jobs. Immigration experts believe that as long as opportunities for
                employment exist, the incentive to enter the United States illegally will
                persist, and efforts at the U.S. borders to prevent illegal entry will be
                undermined. Therefore, these experts believe that reducing the availability
                of employment for illegal aliens should be an integral part of a
                comprehensive strategy to reduce illegal immigration.

               In this statement, I make the following points:

             * Significant numbers of aliens unauthorized to work in the United States
               have used fraudulent documents to circumvent the employment
               verification process designed to prevent employers from hiring them,
               thereby undermining the effectiveness of the process. Employers seeking
               to comply with the law can be deceived by fraudulent documents, while
               those seeking "cheap labor" can intentionally hire unauthorized aliens
               under the guise of having complied with the employment verification

             * INS has taken steps to improve the employment verification process, yet
               considerable obstacles remain.

             * INS and the Department of Labor's immigration-related worksite
               enforcement efforts have been limited, and INS' employer investigation
               efforts have produced modest results.

             * INS is changing its approach to worksite enforcement, but it is too early to
               gauge its success.

               We made recommendations in our report that are shown at the end of this

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                        ILLEGAL ALIENS: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

                        The Immigration Reform and Control Act (IRCA) of 1986' made it illegal
Background              for employers knowingly to hire unauthorized aliens. IRCA requires
                        employers to comply with an employment verification process intended to
                        provide them with a means to avoid hiring unauthorized aliens. The
                        process requires newly hired employees to present a document or
                        documents that establish their identity and eligibility to work Employers
                        are to review the document or documents that an employee presents and
                        complete an Employment Eligibility Form, INS Form 1-9. On the form,
                        employers are to certify that they have reviewed the documents and that
                        the documents appear genuine and relate to the individual. Employers are
                        expected to judge whether the documents are obviously fraudulent.

                        IRCA also provides for penalties or sanctions, such as fines, against
                        employers who do not complete the verification process or who knowingly
                        hire unauthorized aliens. INS, under its worksite enforcement program,
                        and to a limited degree, Labor, are responsible for checking employer
                        compliance with IRCA's verification requirements.

                        IRCA also :prohibits employers with four or more employees from
                        discriminating against authorized workers. The Department of Justice's
                        Office of Special Counsel for Immigration-Related Unfair Employment
                        Practices (OSC) and the Equal Employment Opportunity Commission
                        share responsibility for investigating complaints alleging immigration-
                        related discrimination.

                        IRCA's employment verification process is easily thwarted by fraud. Large
Fraudulent Documents    numbers of unauthorized aliens have used fraudulent documents to
Have Undermined         circumvent the employment verification process. For example, data from
Effectiveness of INS'   INS' employer sanctions database showed that, over the 20-month period
Employment              from October 1996 through May 1998, INS identified about 50,000
Verfication  Process
        *unauthorized                aliens who had used 78,000 fraudulent documents to obtain
                        employment. About 60 percent of the fraudulent documents used were
                        INS documents; most of the rest were Social Security cards.

                         Large-scale counterfeiting has made employment eligibility documents
                        widely available. For example, in November 1998 in Los Angeles, INS
                        seized nearly 2 million fraudulent documents, such as counterfeit INS
                        permanent resident cards and Social Security documents. These
                        documents were headed for distribution points around the country. In its

                        ' P.L. 99-603, 8 U.S.C. 1324a et sea.

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                         ILLEGAL ALIENS: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

                         1997 report to Congress, 2 the Commission on Immigration Reform
                         reiterated its 1994 conclusion that the single most important step that
                         could be taken to reduce unlawful migration was the development of a
                         more effective system for verifying an employee's authorization to work.

                         INS has undertaken several initiatives to improve the employment
INS Is Taking Steps to   verification process, but it faces significant obstacles. First, as mandated
Improve Verification     in the 1996 Act, INS is testing pilot programs in which employers
Process, Yet             electronically verify an employee's eligibility to work. However, INS has
Considerable             had difficulty in meeting its goal for enrolling employers in the pilot
Obstacles Remain         programs. Although INS originally expected to enroll 16,000 employers by
                         the end of fiscal year 1999, only 2,500 were participating as of November
                         1998. According to various officials we spoke with, some employers are
                         reluctant to participate in the pilots because of concern that participation
                         may have a negative economic impact on their businesses. According to
                         these officials, employers in some industries believe that, in the current
                         tight labor market, they would not have enough authorized workers
                         applying for jobs if they participated in a verification pilot. The employers
                         reportedly fear that they could be put at a competitive disadvantage
                         because employees rejected by the verification system might go to work
                         for competitors who are not enrolled in a pilot.

                         Another reason for low participation in the pilot program could be that
                         some employers are not aware of the pilots. Other federal and state
                         agencies, such as Labor and state labor agencies, have contact with
                         employers who might be interested in INS' pilot programs. While they did
                         not have a formal role in informing employers about the pilots and
                         generally did not do so, the Labor and state labor officials we talked to said
                         they would be willing to inform employers about the INS pilots.

                         Second, INS has made little progress in reducing the number of documents
                         that employers can accept to determine employment eligibility. Having a
                         smaller number of acceptable documents would make the process more
                         secure and reduce employer confusion. In February 1998, INS issued
                         proposed regulations to reduce the number of documents that could be
                         used from 27 to 14. However, as of February 1999, 27 documents could
                         still be used, and INS did not know when the proposed regulations would
                         be finalized.

                         2Becoming an American: Immigration and Immigrant Policy (U.S. Commission on Immigration
                         Reform, September 1997).

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                      ILLEGAL ALIENS: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

                      Lastly, INS has begun issuing new documents with increased security
                      features, which it hopes will make it easier for employers to verify the
                      documents' authenticity. However, in addition to these INS documents,
                      aliens can show employers various other documents that authorize them
                      to work. Other widely used documents, such as the Social Security card,
                      do not have the security features of the INS documents. Therefore,
                      unauthorized aliens seeking employment can circumvent the improved
                      security features of INS documents by simply presenting fraudulent non-
                      INS documents-such as counterfeit Social Security cards-to employers.

                      Since no verification system is foolproof, enforcing IRCA's employer
INS and Labor         sanctions provisions will always be important. INS has devoted a
Enforcement Efforts   relatively small percentage of its enforcement resources to worksite
Have Been Limited     enforcement, about 2 percent a year since 1994. In fiscal year 1998, INS
                      completed about 6,500 employer investigations, which equated to about 3
                      percent of the country's estimated number of employers of unauthorized
                      aliens. To best use its limited worksite enforcement staff, INS has
                      attempted to target specific industries that historically have had a high
                      probability of violations. Yet, 43 percent of the investigations INS opened
                      in 1998 were not in the targeted industries.

                      To bolster its worksite enforcement efforts, INS in 1992 entered into an
                      agreement with Labor that called for the agencies to work together in
                      identifying employers suspected of hiring unauthorized workers. However,
                      Labor has generally limited its assistance to INS to a review of employers'
                      compliance with the employment verification paperwork requirements.
                      Labor believes that delving into immigration-related worksite enforcement
                      matters, such as the immigration status of workers, could hamper its own
                      mission of enforcing worker protection laws. That is, unauthorized
                      workers, fearing possible removal by INS, could be discouraged from
                      complaining about labor standards violations. About 70 percent of all
                      Labor investigations are based upon complaints; Labor initiates only about
                      30 percent. Under a new agreement with INS effective November 1998,
                      Labor's role in this area has been reduced. To avoid discouraging
                      unauthorized workers from complaining, Labor is no longer to review
                      employer compliance with the employment verification procedures in
                      investigations stemming from complaints. Labor is only to review
                      employer compliance in Labor-initiated investigations.

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                        ILLEGAL ALIENS: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

                        A major goal of INS' worksite program was to investigate employers INS
INS Worksite            believed intentionally hired illegal workers, including prosecuting some
Investigation Efforts   employers for criminal violations of immigration law. However, 83 percent
Produced Modest         of the investigations INS completed during the period we reviewed
Results                 resulted in no employer sanctions. In fact, INS found nearly half of the
                        9,600 employers INS investigated to be in compliance with the employment
                        verification procedures. INS initiated criminal proceedings in only about 2
                        percent of the investigations.

                        INS officials attributed these modest results to various factors. They said
                        that the widespread use of fraudulent documents made it difficult for INS
                        to prove that an employer knowingly hired an unauthorized alien. In
                        addition, they said that INS' requirement that its district offices' worksite
                        programs meet various numerical goals, such as identifying a certain
                        number of unauthorized aliens, may have placed an undue focus on
                        arresting unauthorized aliens, thereby undermining INS' overall goal to
                        target employers suspected of intentionally hiring unauthorized aliens.
                        For the closed cases we reviewed, INS collected about $2.5 million in
                        penalties, about one-half of the $4.9 million employers had been ordered to
                        pay. INS did not collect the balance for various reasons, including that the
                        employer went out of business or went bankrupt.

                        INS is in the process of changing its approach to worksite enforcement.
INS Is Changing 1 `s    INS developed a strategy for enforcing the immigration laws in the interior
Approach to Worksite    of the United States with five strategic priorities. Two of the priorities
Enforcement             involve worksite enforcement. One calls for INS to pursue criminal
                        investigations of employers who are flagrant or grave violators. However,
                        the strategy does not describe the criteria INS will use to open
                        investigations on such employers, such as defining a "flagrant or grave
                        violation." Although INS' previous worksite program goal was similar, 83
                        percent of its investigations resulted in no employer sanctions. Another
                        priority calls for INS to "block and remove employers' access to
                        unauthorized workers." The INS official responsible for drafting the
                        strategy told us that INS plans to build relationships with employers to
                        create an effective deterrent to illegal immigration. By educating
                        employers whom INS has found to have unknowingly hired unauthorized
                        aliens, INS expects that such employers will be better able to comply with
                        IRCA. This, in turn, would enable INS to focus its limited worksite
                        enforcement resources on employers suspected of criminal activities.
                        However, at the time of our review, INS had not specified how much staff
                        it planned to devote to the worksite enforcement priorities.

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                    ILLEGAL ALIENS: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

                    INS faces :significant obstacles to reducing unauthorized alien
Conclusions and     employment. Significant numbers of unauthorized aliens can still obtain
Recommendations     employment because IRCA's employment verification process can be
                    easily thwarted by fraud. Employers who want to hire only authorized
                    workers can be deceived by unauthorized aliens' use of fraudulent
                    documents. Other employers who seek "cheap labor" can intentionally
                    hire unauthorized aliens under the guise of having complied with the
                    employment verification requirements. Generally, employers of
                    unauthorized aliens have faced little likelihood that INS would (1)
                    investigate them, (2) prove that they knowingly hired unauthorized aliens,
                    (3) collect fines, or (4) criminally prosecute them. Further, Labor's efforts
                    to identify employers suspected of hiring unauthorized aliens have been
                    limited and are to be even more limited in the future.

                    Because enforcement measures can only go so far, we believe INS is going
                    in the right direction by testing electronic verification procedures,
                    proposing to reduce the number of employment eligibility documents, and
                    making INS documents more tamper-resistant to try to improve the
                    verification process. However, obstacles such as reluctance on the part of
                    some employers to participate in electronic verification pilot programs and
                    lack of knowledge about them, have hampered INS' ability to improve the
                    process. Electronic verification can be effective with employers in
                    industries with a history of reliance on unauthorized aliens only to the
                    extent that they use it. Therefore, inducing such employers to participate
                    in the electronic verification pilots is important.

                    INS' new interior enforcement strategy lacks criteria for opening
                    investigations on employers suspected of criminal violations. Having clear
                    criteria is important if INS is to focus its limited staff to achieve its
                    enforcement goals. Since INS is just beginning its new worksite
                    enforcement strategy, it is too soon to know how the proposed changes
                    will be implemented or to assess their impact on the employment of
                    unauthorized workers.

                    Our report recommended that the INS Commissioner

                  * as part of the outreach program for INS' pilot verification programs, seek
                    assistance from federal and state agencies, such as the Department of
                    Labor and state labor agencies, in disseminating information to employers
                    about the programs; and
                  * in implementing the interior enforcement strategy, clarify the criteria for
                    opening investigations of employers suspected of criminal activities.

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ILLEGAL ALIENS: Significant Obstacles to Reducing Unauthorized Alien Employment Exist

This concludes my prepared statement, Mr. Chairman. I would be pleased
to answer any questions you or other members of the Subcommittee may

Contact and Acknowledgement

For further information regarding this testimony, please contact Richard
M. Stana at (202) 512-8777. Individuals making key contributions to this
testimony included Evi L. Rezmovic, Michael P. Dino, Tom Jessor, and
Nancy K. Kawahara.

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